Question

Financial Statements of a Manufacturing Firm The following events took place for Chile Inc. during the first month of operations as a producer of road bikes • Purchased $311,000 of materials • Uned $267.500 of direct materials in production • Incurred $232,000 of direct labore • Applied factory overhead at a rate of 80% of direct labor cost • Transferred 3657.700 of work in process to finished goods • Sold goods with a cost of $622,000 • Sold goods for $1.113.400. incurred $257.500 of selling expenses. • Incurred $99.500 of administrative expenses a. Prepare the June income statement for chute. Assume that he was the perpetual inventory method Chi-Lite Inc Income Statement For the Month Ended June 30 Selling and Administrative penses Total Selling and Administrative penses

Answer 1

Solution

Chi-Lite Inc.
Income Statement
For the Month Ended June 30
Revenues		$ 1,113,400
Cost of Goods Sold		$     622,000
Gross Profit		$     491,400
Selling and Administrative Expenses:
Selling Expenses	$     267,500
Administrative Expenses	$      99,500
Total Selling and Administrative Expenses		$     367,000
Operating Income		$     124,400

.

.

Materials inventory, June 30	$ 43,500
Work in process inventory, June 30	$ 27,400
Finished goods inventory, June 30	$ 35,700

Working

		Working
a. Materials inventory, June 30	$ 43,500	(311000-267500)
Work in process inventory, June 30	$ 27,400
Finished goods inventory, June 30	$ 35,700	(657700-622000)

.

Direct material	$ 267,500
Direct labor	$ 232,000
Overhead applied	$ 185,600
Total manufacturing cost	$ 685,100
Less: Cost of goods manufactured	$ 657,700
Ending work in process inventory	$ 27,400